I’ve written about VAT a number of times on this blog, and with good reason – it’s a topic that causes a lot of confusion for online sellers and if you get it wrong it can really destroy your business. In my opinion, registering for VAT when you don’t need to is the biggest tax mistake an eBay or Amazon seller can make!

But all that has been covered before on my blog, numerous times in fact, so what’s the point of today’s article?

As you all know, when you sell on Amazon you get access to all 5 European marketplaces:

Amazon UK

Amazon Germany

Amazon France

Amazon Italy

Amazon Spain

And you can sell to all of these marketplaces with your one seller subscription, which is great! In fact you don’t even need to create multiple listings – you simply create your listings on your home marketplace (Amazon.co.uk for example) and if they’re eligible, they’ll “automatically be re-created in the remaining four marketplaces via Amazon’s ‘build international listings tool’.”

But Amazon have gone one step further and recently a very exciting addition to the Fulfiled by Amazon fulfilment service was introduced, called Pan-European FBA.

The idea behind it is very simple – it allows you to offer your products to all 5 European marketplaces but rather than your stock being stored and shipped from one fulfilment center (as is normally the case) – Amazon will distribute them across ALL 5 countries.

This of course provides a number of important advantages to us as sellers:

It’s FREE!

Amazon don’t charge you to distribute your stock and you don’t even have to do it yourself. You simple send your FBA items to your local Amazon fulfilment center and Amazon then spreads it around all 5 countries (plus two more) based on expected demand.

Your products become Prime-eligible!

Having your stock stored in the home country makes it eligible for Amazon’s sales boosting Prime delivery service in all 5 European marketplaces, meaning you’ll see a big boost in international sales.

Quicker delivery!

It obviously goes without saying that shipping domestically is going to be faster than having all orders sent out internationally from one Amazon fulfilment center. Faster deliveries means happier customers and more repeat orders.

Less FEES!

Yep, you read that right! Even with all the added benefits, Amazon’s Pan-European fulfilment actually saves you money! How? Well because you only pay the local fulfilment fee for that particular marketplace when one of your items is sold and you save the usual cross border fee charged when you sell via Amazon’s European Fulfilment Network (EFN).

Let’s take a quick look so you can see what difference this makes:

So as you can see, you save between 13-38% in Amazon fulfilment fees, depending on which country you sell to, which is a significant amount and nothing to be sniffed at.

I’m guessing you’re now wondering what the problem with Pan-European FBA is? After all, it’s free, it will increase your sales, and it actually saves you money in fees…!

But there is a huge downside to it that, judging by the emails and questions I receive, a lot of people are seemingly unaware of:

It means you have to become VAT registered in every country that your stock is stored in!

This is due to the EU law introduced last year to try and tackle overseas sellers who store stock in Europe, allowing them to undercut local sellers WITHOUT having to pay the same taxes.

Following this new rule, you now have to register for VAT as soon as you have inventory stored in a country. So if you have stock stored in Amazon’s fulfilment center in Germany, you need to register for VAT in Germany. If you have stock stored in Amazon’s fulfilment center in Italy, you need to register for VAT in Italy, etc. etc.

What this basically means is that you’ll have to register for VAT in every single country that Amazon stores your stock in, which also includes Poland and the Czech Republic (as well as the 4 European marketplaces).

And no – it doesn’t matter how much you’re selling. This is different to local VAT registration, where you only have to register once you reach the sales threshold (this is currently £83,000 in the UK but it’s generally increased every year).

As soon as you have stock stored in a European country, you need to register for VAT in that country (even if your sales are £0).

In comparison, when you store and ship products from a sole Amazon fulfilment center, we’ll use the UK for this example, then you only need to register for VAT in the European countries that you sell to once you reach their distance selling thresholds. Now these differ from country to country but generally it’s €35,000 (roughly £30,000) with the exception of a few countries (Germany, Netherlands, Luxembourg) where it’s €100,000 (roughly £85,000).

Just so there’s no confusion – using Amazon’s Pan-European fulfilment service means registering for VAT in 6 different countries. You’ll have to charge the correct VAT rates to the correct customers, keep records and file VAT tax returns for all of them as well.

People find it too much cost and work to do this for one country, never mind 6! I shudder just thinking of all that paperwork – and the cost is going to be huge as well as you’ll most likely need to hire a local accountant to take care of all the country specific details.

Realising how this is going to put off the majority of sellers, Amazon have teamed up with KPMG (one of the “big four” auditors with a revenue of $25 billion a year) to offer a special, discounted rate VAT service for Amazon marketplace sellers.

KPMG are offering Amazon sellers VAT registrations and filings in up to 7 EU countries at special bundle and discounted rates.

The cost is £700 per country per year OR £3600 per year for all 6 countries (which works out at £600 per country per year):

Now this may seem like a lot of money, and well… IT IS! But that’s because you’re registering and filing VAT returns in 6 different countries – so it’s actually not an unreasonable fee to charge. And to me it’s a perfect measuring point – unless you’re happy to pay £3600 for the privilege, then you should simply continue selling to Europe from Amazon’s UK fulfilment center.

After all, how much do you need to be selling to make that worthwhile? We discussed earlier how you save 13-38% in Amazon fees by using this service, so let’s call that 25%. That means to save the £3600 yearly fee you need to be paying £15,000 in Amazon seller fees per year (and that’s just talking about your fees for sales to European countries).

I know that’s a very simplified way of looking at this and it ignores the other benefits, but I just wanted to illustrate how this should only be considered if you’ve got the sales numbers to back it up.

All in all, I can’t see how this is beneficial at all and I hope you see why I called this a VAT trap – really nightmare is a more accurate term.

If you’ve fallen for the Amazon sales talk and signed up for this Pan-European fulfilment, then I’d love to hear from you in the comments section below. Has it made a huge difference to your sales and how are you handling all the tax requirements?

Until next time!

All the best,Andrew

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Thank you for the simplified version of VAT in the EU Countries. It is such a mine field, you tend to freeze before you even start especially when dealing with Amazon !

My question is though our sales in the EU warrant us being VAT registered in all of the countries even though some are only used to store our stock. Our problem is we are unable to complete the VAT returns in these Countries ourselves, we just are not that clever. We therefore have to choose a company to handle all of this on our behalf. We keep hearing negative and positive points about so many companies we do not know who we should go with. Do you or anyone have a fairly reliable company or companies that you could suggest ? We are very aware that no one is 100% efficient but as it seems they have to access our seller account we want to be sure we use a company that are reasonably efficient, sensibly priced and trustworthy.

Not looking to hold anyone to account here just wnt names based on everyone’s experiences.

Great post, just what I was looking for. I am still trying to find the best way forward for my Amazon business I am doing about £2k turnover per month on Amazon UK, about £600/m on .de about £200/m on .fr and very little in .it and .es. I am not UK VAT registered as below threshold. I currently use PAN European FBA, so I understand that I should register for VAT in all the relevant countries to continue using it. That alone would probably stop me dead but Amazon are offering me a VAT services promotion to register in all those countries and get first years filings for free – but I am concerned what I am letting myself in for. What sales would then be taxable? Everything is under the threshold values for VAT in those countries but do I understand correctly that VAT would be payable in Germany on any order fulfilled from an Amazon German Warehouse, even if below the 100K threshold? If I do register will it be easy to deregister in future?

You haven’t said what your profits are, but most likely, for that size of a business (turnover), you will be in huge loss after registering for VAT in those countries. First of all, you will have to either increase the prices OR take a loss on profits, as when you become VAT registered, you have to start charging VAT on sales. Secondly, you will have to pay thousands per year for VAT returns (after the free trial).

As you’re already selling using PAN-EU, the sales won’t magically increase once you get VAT registered. Most likely they will even decrease if you increase your prices to offset VAT costs. So you either add more items to your product portfolio or increase sales for existing SKUs to get sales to the next level, which will make the whole VAT thing worthwhile.

Lastly, IF you’re already using PAN-EU, you actually have no choice but to register for VAT in those European countries and do back-dated VAT returns on past sales. Otherwise, you’re basically breaking the law and not paying proper taxes. This also means that when you register, you will be hit with a pretty nasty VAt bill…

For all the reasons I have listed now, I usually don’t recommend newbies to go with the PAN-EU program, until they hit a decent turnover and profits, that can support this whole tax nightmare.

Yes, of course – PAN EU program opens doors to so many extra customers and for many businesses, it’s a great way to increase sales.

The paperwork (with VAT registrations) and frequent tax payments, with more complicated accounting, is something you have to deal with, yes. But as long as all these extra expenses are covered by additional profits and more, it’s totally worth it.

This article/post is more about brand new Amazon sellers who are just starting out, for them, the whole VAT thing will be too complicated and expensive.

Thanks for the post and information. I personally hate the illegal tax, VAT!
That said, we have to comply if we reach the threshold.
We are selling our first product in the UK, but we have strong family connection in Germany and want to sell this product in that market.
I’m aware of the 3 methods to sell across the channel, but I’m struggling to find the size and weight limits for a product, which will influence the costs etc.
Our product is large, weighing in at 21.5 kg, with a carton size of 102 x 97 x 66 cm.
Are we restricted in any of the 3 methods?

Hi Andrew, great article, just what we have been looking for. We signed up for Pan-European FBA a couple of months ago but feel it would be a good idea to bow out before things get too complicated. However, cannot see how to do this. Do you have any info on how this can be achieved, would be really grateful.

Hello Great Post, I have a Question, we do sell and stored from Amazon FBA UK, with FBA Exports, we already have our Vat. and we have been selling to Spain, Italy, Uk, France, and Germany (Germany recently change the legislation, and they say that we have to register as well even if we don’t store in Germany), so we are paying VAT for Uk Sales My question is

with our setup do we have to pay any VAT for our sales in Spain, Italy, France?

No, you don’t have to. You will only need to register for VAT and pay tax in those other countries when your sales to each country exceeds the Distance Selling threshold. More on this you will find in this blog post:

You write in this post that Amazon has the vat service for 700 EUR per country per year.
In the comments down you link to this page where it is offered for 400 EUR. For registering and filling.
What’s the difference between the two?

Joining the pan European was the worst mistake of my life. I see it as a scam. It is good for Amazon but it is a nightmare for sellers. Since joining the pan European I have become poorer. I have become indebted. Last 6 weeks Germany alone sent me a bill of nearly 20000 Euro. I cannot see this amount entering my account.
Amazon deceived me when they invited me to join pretending it was a privilege.
I have deregistered from the pan European but Germany continues to pursue me with bills. I have no clue when this is going to end. I might have to simply get items stored in Germany and Poland destroyed. My amazon business as it is now is dead.
And to prove it is a scam simply deregistering does not solve the problem. Amazon wants you to be there forever.

I’m so sorry for what happened to you Kev. I am going through the same nightmare now though admittedly less drastic as I haven’t actually started selling. Can I please ask you, how did you deregister from the European Unified Account? I can’t seem to find any info on this. Thank you!

Great post, thank you. I wondered if you could help with working out the stock transfer side of things? We are registered and submit VAT returns in seven EU countries and then have our UK VAT return for sales made where the UK is the point of sale and goods are dispatched from the UK warehouse. That said, all of our stock goes straight from our UK supplier to the UK Amazon warehouse; Amazon then move our stock when they want to across their own network of EU warehouses – should we be recording this transfer as it’s not necessarily a direct sale? We can’t raise an invoice to Amazon because it’s not a sale, it’s usually just going to sit somewhere in Poland until Amazon decide to use that stock to fulfill an order from one of the Amazon platforms. Any clarity you can offer would be great!

Great info! I am selling on Amazon DE (FBA) and I am registered for VAT in DE. I noticed that when a customer from another EU country buys my product, Amazon calculates a different VAT percentage. For Germany it is 19% en for customers in the Netherlands they use the 21%. I am a little confused; do I pay the taxes for that sale in the Netherlands in Germany? And if yes, do i pay this 21% to the German Tax Authorities or the 19% rate?

It depends on who the customer is (VAT payer or no) as well as whatever they buy directly from you on Amazon OR Amazon buys the item from you and then sells it on (you will see these transactions in the monthly Global listings invoice).

Also – make sure that you have enabled VAT calculation services in your account and you have provided valid VAT number there so that Amazon knows your VAT status.

With all things being equal, if someone buys from you and is NOT VAT registered – whatever it is from Germany or Netherlands, the VAT rate should stay the same – 19% one that is German rate and that’s where you pay the VAT. In your example, something else is going on and that’s why there’s that difference.

Hi Andrew, great thread!
This is probably going to sound silly, but if I am selling from the UK using FBA, do I not have to pay taxes in the EU countries or is it just VAT once you hit the threshold? Lowest I believe is France at 35000euros, like here in the UK you have to sign up for tax if you earn i think £2000 or more working, do I not have to do this for every EU country? (exclude Germany) Will it just reflect in my end of year tax return for UK?

No, you won’t have to pay income/corporate taxes in those EU countries. All you pay is VAT (when you reach distance selling threshold OR if you send goods to store in those countries using the Pan-EU program).

This is really useful, thank you! I wonder if you can help with my query.
We are based in the UK and not VAT registered as we are under threshold. We use Amazon FBA to supply UK only at the moment. My question is – if we copy our listings to Amazon.fr or Amazon.de (or the other European marketplaces) but don’t select pan-european FBA – would this mean Amazon would supply these European customers from the UK warehouse? Would we then need to register for VAT in those countries?

Hello,
I am selling on Amazon Germany Marketplace from past 3 years. I am sending my products from India to Germany. I am not doing Amazon FBA in Germany, still I have received the notice from Amazon to get the German VAT id.
I would like to know in the above case, do I need to register for German VAT certificate?
Will Germany tax authority ask me to pay previous 3 years taxes also?

Yes, as far as I know, this means you will need to register for VAT number in Germany. At least that’s how it looks right now from the info I can gather.

As for previous 3 years – IF your sales to Germany were LESS than 100 000 EUR per year, then no – you won’t have to pay anything for previous years as you were under the threshold of VAT registration in Germany.

I am planning to start selling on Amazon. I have company registered in France and I am not registered for VAT until I will reach €35.000. I would like to be focused only on French and Czech market and shipping from France by FBA. In this case is it possible to apply just for 2 markets and not European Pan and register for VAT once I will reach the limit on each country limits, do I understand it right ? All this VAT thing is very confusing and seems like a headache to be register for PAN and deal about VAT with each country.

I’m not EU resident and are currently selling in Amazon.es. I am already VAT registered there and want to expand to Germany. At the moment Amazon charges me about 11 when I sell a product to Germany for 17 and is fulfillled from Spain.

I’m considering paneuropean program to save on this high charges. I am prepared to register for vat in Germany, is there anything that I’m not considering here?

Do you know if the amazon VAT service will automatically send the correct VAT data to the appropriate fiscal administration or do I need to enter data provided by amazon manually in every juridiction every month? In this second case, the language barrier may be too difficult.

HI Andrew
This might be a thicko question but here goes…….
I am NOT VAT registered and have been selling on Amazon FBA now for coming up to 12 months. I only have sales of £7k for the year (it’s a hobby) but I am really confused about VAT. I receive my money every 2 weeks but do I have to pay VAT to the government on the these sales I have completed. I import items from China and pay full import and VAT on their arrival.

Hi Thanks For Your So Quick Reply,
I Just had a talk with UK Seller Support, and they just told me coz u have sent an inventory to UK you will be required VAT Number in any case if u remove the inventory as well, actually she was not able to reply properly coz she was putting my call on hold again & again to get the answer,
Please Make Me clear if I Remove the Inventory from the UK after completing Pending Orders in the FBA, would I be able to be clear from all these VAT Issues..
Also I cannot Remove my inventory from FBA till 26th as she said(UK Customer Support) that they are shifting there FBA center due to which it will not be available for Removal for next 10 days or so..
Also I am Afraid till then I will clear my inventory in sales only coz I have sent a very little inventory for a test like around 34 Items out of which 3 are already sold..
What would be the consequences please in every situation.

Sir I am based in India and I do not use FBA, I ship my orders myself to buyers directly from India, if I ship directly from India to the buyer in UK on the orders received on Amazon.uk then do I need to get a UK VAT number. In this case will I be able to complete my seller registration and start selling on Amazon.uk without VAT number.

How will we know- to which stock locations within the Pan European Programme Amazon is sending our products, so we can do the correct filing for VAT. My understanding we send deliver to AMAZON UK stock locaction and they distribute within the 7 countries.

l have a question which is not completely related to this topic but I’m not sure where else to ask and it looks like you might be able to help out. My friend wants to start a business with a company based in Bulgaria selling goods on the Amazon UK platform (I don’t think they have considered selling elsewhere in Europe but they might be interested in this Pan European offer as well ). Now Amazon have told them they need to register for paying VAT in the UK but they won’t be making enough money to pass the threshold of 85 000. They are registered as a limited company in Bulgaria but still won’t be paying VAT there either. From what I understand they shouldn’t have to pay VAT here unless they are meeting the treshold?! What is the procedure in this case? Would it be worth it to do it this way at all? Many thanks in advance

Our business are looking into signing up with KPMG for our Pan EU FBA. We are a limited company with an existing VAT Number, and was just wondering which package offered by KPMG would be the most suitable for us. The package of registration within 6 countries seems to make sense as we are already VAT Registered within the UK, however this mentions its for EU Based sellers and wasn’t sure how our status would change after we leave the EU. In this case do you think it might be better to select registration for 7 countries for ‘non-EU Based Sellers’?

I am a US based company selling Books – only books (small publisher) in the UK/EU on Amazon’s FBA. We have our hardback books printed in UK and stored in FBA Amazon warehouses for fulfillment to UK & EU customers. We also import from the US our paperback books, store them at FBA Amazon warehouses in UK and EU to be shipped to customers. 50% of these books we have stored at FBA Amazon are books we give as gifts to our customers, for subscribing to our financial services. FBA Amazon acts as our dropship type fulfilment center – gets our books to the customers faster and is cheaper then shipping it to the customer from the US.
My questions are:
#1 Do we have to register for VAT? I read somewhere that books were zero rate??
#2 Do we have to pay VAT on books we have made in the UK?
#3 Do we pay VAT only on the books we import and store in UK?
#4 What would our VAT be based on if books we send from UK warehouses to a to UK customers are free? Would they base the VAT on the value of printing these books?

Thanks in advance, just trying to sort out this VAT tax, its not too straight forward.

Yes, printed books in the UK are ZERO VAT rated. But it doesn’t mean you don’t have to register for VAT – as far as I know, you still have to register for VAT and do VAT returns etc., you just don’t charge any actual VAT on your sales and apply 0% VAT rate.

And you do need to register for VAT in all other EU countries your books are stored in PLUS in those other countries it could be that books are NOT ZERO VAT rated, so you will have to charge normal VAT on those sales.

All in all your situation is specific/complex and you should seek professional accountant’s help to help you sort this out in a way that is most beneficial to your company.

If you could help, I’m slightly confused regarding vat thresholds in eu states.

So if a UK VAT registered company sells directly to consumers within the e.u from the UK, and if sales in each e.u state are under their relevant thresholds, would you charge VAT on your product to those e.u customers ? Even if your UK sales are are exceeding the £83,000 threshold and you are paying (and charging) VAT in and for UK sales.

This is a really helpful discussion concerning VAT. My question relates to the VAT thresholds for each EU country. In the UK, the £83k+ threshold is based on total overall income whether that comes from any other country into the UK. But in the other EU states, are you saying that you don’t need to register for VAT until sales from each of those countries reach each respective threshold?
Thank you

thank you for great article. We start selling a year ago and I singed in for PAN-EU and of course I was not aware of this VAT trap. However, our turnover is around 300k€ on German Amazon, which means we pay around 75k on Amazon fees. After reading what you are mentioned, it looks we may saved good money on Amazon Fees and therefore PAN-Eu is good for us in terms of fees, what do you think?

I’m currently trying to deal with the VAT registration since we did not have them in all 7 EU only in Czech Republic and Germany. And it looks like a nightmare also financially. One Tax consultant specializing for Amazon asked me for 18K for the VAT registration in all the markets. So to be honest, I am quite happy after reading you can hire KPMG to do it for just £3600, that’ really great news.

My question is: I have pay VAT from those 300k to German government. I assume Amazon pays also VAT from those 75K which gets form us, right? Can I lower my VAT returns to Germany by those 75k paid by Amazon?
So instead of paying VAT from 300k I would pay VAT only from 225K? I hope I explain my self in the way you can understand that.

I’m sorry but I am not really in a position to give advice on VAT as it’s a VERY complex and detailed topic, especially if multiple countries are involved. You do need to speak with a tax/VAT consultant about this.

But as for the VAT registrations and VAT returns for Amazon purposes – you can get it done for just 400 EUR per year, for each country using Amazon’s VAT service:

I have a VAT registration because I used to sell on Amazon FBA in UK couple years ago, I do not sell on Amazon UK for the last 2 years. I still have VAT registration and filing 0 returns.

I sell only on Amazon US through FBA program. Amazon has export program and will ship my items to customers in UK if I sign up for export program. (this is not global selling, just an export option). Do I need to charge VAT for goods shipped to UK if I use Amazon export program in US? My goods are in US only.

This is completely inaccurate. You do not need to register for VAT in every country you have stock in. You need to register for VAT when your threshold of sales reaches that of the country that you are selling in before registration. For example in Germany, it’s when you sell €17,500 per year. €82,000 in France, Italy €60,000 all this information is quite easily available online, I don’t know why you are telling people they all have to be VAT registered in every EU country they sell in.

You DO have to register in every EU country you have stock in, from day one. So if you use European Amazon warehouses and send stock to those countries, you have to register in those countries for VAT from day one.

IF you don’t send stock to those countries but simply sell over distance, from your location/warehouse, then you DON’T have to register for VAT in those countries until you reach those distance selling thresholds you’re mentioning.

I’m already VAT registered for all 5 main countries for Amazon Europe because I already reached all sales thresholds, but I’m thinking on using Poland and Czech Republic as Germany’s secondary warehouses and I want to be very sure I need to register on both countries too, so I would really appreciate direct and clean information about it.

Also, it sounds strange that just 2 weeks ago Amazon published a note in Seller central regarding the need of registering in UK due to the new position of this country in the EU, but just UK. So Amazon would be suggesting that there is no need to do the same for Spain, Germany, France or Italy.

I can assure you that it is correct information and yes, you do need to register in Poland and Czech Republic too, if you plan on using FBA there.

As for Amazon now pushing the UK VAT registrations – it’s LONG DUE!!! HMRC has been in talks with Amazon for a long time now and finally they have come to agreement that Amazon will actually undertake the VAT registration number vetting part and sort this mess out.

It’s NOT a new law or rule!!! This has been in law for years now, just not many sellers are following it. Amazon will now police this in the UK and most likely in the EU too very shortly.

Hi Andrew,
Thanks for the article. I am a sole trader, only selling in UK, using Professional seller account and not registered for VAT as not doing level of business to the £83k threshold. But I am being charged VAT on FBA, seller and product ad fees – should I be?

If yes, then surely there is are advantages of being VAT registered for people just starting out as they would be able to claim the VAT back on these? Haven’t done the maths yet when factoring the VAT returns on sales to HMRC.

No, there’s no advantage of being VAT registered in your position – yes, you won’t pay VAT on Amazon fees BUT you will have to charge VAT on your items – basically this means increasing your prices by 20% or taking smaller profits (in simplified words).

So do not register for VAT if you sell only in the UK until you reach the threshold.

Thanks for the reply Andrew – that is what I thought but Amazon’s VAT knowledge centre page says Businesses need to register even if goods are stored in the UK? Also import VAT paid at the time goods are imported into the EU can also be claimed back? Does this change anything / make being registered more viable?

Realistically, you only have to account for an additional 20% on what would be your profit margin, you don’t have to increase your selling price by 20%. Still sound advice not registering before necessary and you can claim VAT back for a period before registration, can’t remember how long but we had a nice cheque from them when we registered.

Hello,
I have the following questions.
If i sell a product in Germany 19% Vat
The selling price is 22,68 € the fee is 5,76 € (3,40 € referral fee + 2,36 € fulfilment fees).
The vat is calclulated on the 22,68 € and i have to pay is 3,62 € or
22,68 €-5,76 €= 16,92 € so the vat to be paid is 2,70 €.
What is the correct way?
Also when amazon sales a product clearly writes inclusive of German Vat but when an fba seller sales the same product it says nothing about Vat.
I am a little confused on how to calculate the vat because after paying the vat and the amazon fees there is no profit for the seller except there are using other ways to avoid paying the vat and maybe their price is without Vat.
Thanks for your time.

The VAT is calculated on the item’s price – it has nothing to do with Amazon fees. So the VAT is calculated on the whole 22.68 € in your example.

As for Amazon showing VAT and FBA sellers not – if FBA seller is NOT VAT registered, then no VAT will be shown on invoice. Only VAT registered sellers will charge VAT and show that in invoices. Amazon is obviously VAT registered so they will show VAT on all invoices.

You say “Also, don’t forget that you can sell on regional sites and fulfil orders from Amazon UK too, without registering for VAT etc. in those other countries.” We currently sell on Amazon.com and Amazon.co.uk. How do we expand to the regional sites and fulfill from Amazon UK? It is not obvious to me.
If my company expanded from UK only to all five EU Amazon sites, we estimate over `one million Euro yearly sales — is that “massive?”

Hi Andrew,
I’m an USA seller that was selling goods on Amazon UK. Amazon forced me to register for U.K. VAT, which I did then HMRC states to contact me to pay for VAT back tax. The amount asking is more than the profit I made and more than what I can afford. I have stop all sales into the U.K. now, but what will happen if I Ignord their paymenr request?

Yes, it could be that you owe more VAT than you have made profit, especially if you spent aggressively on paid ads. This is why you always need to monitor your sales and VAT amounts so you don’t get a big surprise after 3 months when you need to do your VAT return.

I wouldn’t recommend you ignoring that payment request from HMRC as it can get you in serious trouble. Communicate with HMRC and try to set-up a payment plan or something so you can pay it off in instalments.

As there is no Amazon marketplace in Poland or the Czech Republic, and assuming no sales are made in those countires by any other means, would the returns made in Poland and the Czech Republic be nil returns?
My assumption is that this would be the case, and that the only reporting required would be sales on the relevant countries VAT return as and when sales are made.
I have received advice from a Czech agent that I am not sure about: “the VAT returns would not be zero but the company must declare transfers between the FBA warehouses and the distance sales to other EU states (even if these sales were taxable in other EU states)”.
What is your take on this advice?

We will be registering for PAN FBA. As inventory will be stored in fulfilment centres in Czech and Poland, we will be required to register for Vat in those countries. The distance selling rules will no longer apply.
Do you know how we must report inventory movements on our UK return? And if sales are made in an EU country, where the inventory is used from a fulfilment centre in say Poland… would the sale be recorded on a Polish vat return?

In that case, yes, you need to register for VAT in countries inventory be stored.

YES, sale from a Poland location will be recorder on Polish VAT return. I won’t be able to help with technicalities of it though as I completely outsource my accounting and I know that my accountant works VERY hard to manage all the ins and outs of Amazon platform, VAT returns etc., so very un-likely you’ll be able to do it on your own…

Thank you for the great article Andrew. I myself am looking at registering for VAT in Germany and France as these are two of my biggest markets outside of the UK and being Prime eligible in these countries would only be beneficial to my sales.

Benefit of 1-year of VAT Services on Amazon including VAT registration and filing for up to 6 countries with VAT Services on Amazon at no additional cost to you (a value of up to €3000) if you join Amazon’s Pan-European FBA Programme. This Promotion is available only for European Sellers1.”

I was wondering what your thoughts are regarding this as they are making it very attractive to go through their Pan European program. I was also wondering if it possible to choose which of these markets I sell in to keep control of it.

Hello Andrew
Thanks for the great article, as usual an useful insight of online selling.
With reference to Amazon and how VAT is being charged, I’m now very confused.
I’m watching Jungle Scout sessions on how to set up an Amazon business in Europe. In their 6th session they covered VAT etc.. But they stated that it is compulsory to register for VAT in UK if you are storing your goods in an Amazon warehouse in UK, regardless of the turnover/threshold.
In your previous posts you advised to wait to register for VAT until a seller reaches the threshold… Has this changed recently?
Thank you for your assistance

I have a business on Amazon and use FBA warehouses in UK. I am registered as a self employed here in UK but i haven’t registered for VAT yet. Still below the VAT threshold in UK. Do i need to register for VAT if i store my inventory in the UK as long as i live and have a company in UK?
Thank you very much for your time,

The IT and ES thresholds are 35,000 Euros Net of VAT but I am well below that.
The DE threshold is 100,000 Euros Net of VAT and I am well below that too.

However my French sales will be around 40,000 Euros by the end of this year, 2017. So I need to Register with the French Tax authorities.

A pain no doubt, but would Amazon then move some of my UK stored stock to France so that French buyers could enjoy Amazon Prime or would Amazon only allow stock to be stored outside the UK if you register for VAT in all European Amazon Marketplaces?

It is possible and easy.
Settings,
Fullfilment by amazon,
Cross-Border Fulfilment Settings,
Allow inventory to be stored in other countries:
France, United Kingdom
save
now your inventory will be stored in those 2 countries.
You can also send inventory to France now.
ps. You do NOT need to enable Pan-European FBA

First off thank you for your amazing blog. I recently found out about it and it has been extremely informative and helpful in my new journey.

I am new to Amazon FBA, around a month, UK based, intending to sell into the US market. I’m close to getting my first product shipped from China to the US. It’s a small test order of around 100 units. I’m dipping my toe in slow so to speak. Last night I registered as a professional seller but instead of being billed the $39.99 subscription fee, I was billed $47.99.

I’ve combed through your website and failed to find anything on the topic. Google surprisingly only yielded a bit of information. But apparently the extra $8 is 20% EU VAT tax. According to an Amazon forum post, if you live in the EU, Amazon.com will charge you VAT on their services INCLUDING fba fees. This has come as somewhat of a shock to me, as it would wipe out a large chunk of my margin. I thought i was thorough in my research, but turns out i wasn’t. Before being allowed to become a professional seller, i had to fill out a “Tax Interview”. It was very short. I stated I am an individual not a business, a UK citizen living in London.

Do you have any advise or information on the topic?

Is this the correct process or am I missing something? Why do I have to pay VAT on physical goods that never enter the EU?

I personally don’t sell on Amazon USA so don’t know all the small details but yes, they do charge VAT on your pro seller subscription fee. This is required by law and is done for any digital product/service.

Not sure about the FBA fees though – you should contact Amazon’s customer service and find out whatever FBA fees will be VAT applicable or not.

If they’re, I would recommend that you register for VAT, to claim back VAT you pay on these expenses. As your goods will be exported outside of the EU, you won’t have to charge VAT on your selling prices and will be able to get back ALL of the VAT you pay to Amazon via HMRC (when you do your VAT returns).

I believe Amazon head quarter is in Europe which is why the VAT is added to FBA fees even if you sell in US. Amazon does not issue VAT for these fees but you will see their own VAT number on seller central document or FBA fee statement. For this reason as far as I am aware you can’t claim back the VAT. However if you register for VAT and provide this number to Amazon, future VAT added to FBA fees or subscription will not be added.

So how do you sell in other European countries by keeping your stock in a UK fulfillment center?
I thought that as soon as one wants to sell out of the UK, Amazon would automatically move part of the inventory out of the UK too in order to be local to their customers.

Is there a way to sell in other European marketplaces by keeping the inventory in the UK (and so no need to be VAT registered!) ?

Hello Andrew,
I am from CZ republic. I am a seller on FBA Amazon, and I was required to register for UK VAT as my 2 pairs of socks ended on Swansea Amazon storage on June 2018, unfortunately I didn’t know about this return from customer. So I sent for UK VAT but already 2 weeks no replies. Left only 1 week to sort it, after my FBA account will be closed.
Thanks
Rimma

Hi Andrew, yes I signed up to pan Europe programme and did have a boost in sales but then realised about all the other tax implications and de registered. Unless you are selling huge amounts, it’s not worth the extra head ache. I just up my prices to cover the extra fees when sending from my UK FBA inventory.

Really interested in this article as Amazon are trying to get me signed up at the moment. What would you class as massive sales? I’m really not sure whether to go ahead or not. Also, if you register for VAT in all these countries does it open up any other potential things you will be liable for in those countries?
Thanks
Sarah

Then you can make a more informed decision whatever it’s worth selling on regional sites too.

Also, don’t forget that you can sell on regional sites and fulfil orders from Amazon UK too, without registering for VAT etc. in those other countries.

Lastly, if you do go ahead and register for Pan European program, I would highly recommend to use Amazon’s VAT service, where they will help with VAT numbers and VAT returns. As doing those VAT returns in every country won’t be something you can really do on your own, unless you’re an accountant by trade.